The Business/Government Relationship– a Comparison of the Key Features in China and Australia-

The business/government relationship
– a comparison of the key features in China and Australia

China and Australia, provide two samples in pursing social welfare in different ways and hence result in distinctive social structure as well as government-business relationship. Convergences and divergences coexist in these two paradigms, in a way that suit each nation well.

Private sector Private sector is the value chain which engages political, economic and social factors together. It is of paramount importance in both two Australia and China in enhancing people’s living standards, such as providing goods and services, creating employment, contributing tax revenue and etc.

Australia has a modern developed market economy. According to IMF (2010), with 0.99 trillion US$ GDP in 2009, Australia ranked 13th in the world largest economies. Like most developed countries, services sector dominates the economy, representing 68% of GDP. Meanwhile, endowed with vast lands and rich natural resources, its agriculture, especially wool and wheat, and mining industry, such as iron-ore and gold, constitute Australia’s major export products, accounting for 57% of the nation’s overall exports.

Private sector is the major contributor of Australian economy. Since the massive privatization in 1980’s, this country became the “world leader in selling public assets” and “one of the world’s keenest privatizers” (Sydney Newspaper, 1998, as cited in Wettenhall 1999:145 ). In 2010, 8 Australian private companies presented in Fortune Global 500 list (Fortune 2010), ranking from No. 139 to No. 458. The shining brands include BHP Billiton, Wesfarmers, Woolworths, Commonwealth Bank of Australia and etc., adorning Australia’s national flag. |

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In terms of scale, Chinese economy is undeniably bigger, with $4.9 trillion GDP (IMF 2010), ranking the 3rh world largest in 2009. Recently, it was officially announced by the chief currency regulator Yi Gang that China has already overtaken Japan to be the second, only dwarfed by U.S. However, as for GDP per capita, China achieved only $3,677, less than 1/10 of Australia ($46,278 in 2009). Major contributors to GDP include industry (48.6%), services (40.5%) and agriculture (10.9%).

The conception of “private sector” is quite young in china. Before 1978 reform, all enterprises were state-owned and everything was public. Government managed business sector in a “completely planning” fashion, including allocating resources, setting prices, determining output and distribution and monopolizing foreign trade. Yet since 1978, earthshaking economic reform began staging. Private ownership was reintroduced and recognized. Market force was encouraged to govern domestic resources allocation while government gradually diminished its direct participation in business. 30 years passed, China became one of the fastest-growing economies, with a staggering average growth rate 10% (NBSC 2010). Driving forces come partly from vast state investment in infrastructure and heavy industry and partly from private sector expansion in light industry. However, despite the amazing growth in private-owned corporations, they still struggle under the shadow of SOEs and remain small and medium sized. Enormous SOEs is one of Chinese characteristics. Though private sector companies overwhelm SOEs in number, they are eclipsed in size and significance. In 2010 Fortune Global 500, 46 Chinese enterprises emerged on 500 league and 3 advanced up into top 10. However, less than 15% are private. These behemoths are ridiculed as “Chinese national team”, implying their state-owned or state-invested background and huge windfall profit coming from monopoly rather than competitiveness or profitability. For example the top three are typical energy monopoly enterprises Sinopec, State Grid and China National Petroleum. Nonetheless, the irresistible trend of Chinese reform is business expansion and many bright spots in...

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